London's August Sales-to-New Listings Ratio Fell to 37.5%, Deepening Buyer Leverage Amid Record Inventory

Market summary

The London and St. Thomas Association of REALTORS® recorded a sales-to-new listings ratio of 37.5% in August 2026, down from 44.5% in July, while months of inventory reached a new peak of 6.3. This shift places the market well below the balanced range, signaling increased buyer leverage.

Central finding

The August 2026 sales-to-new listings ratio for the LSTAR board area fell to 37.5%, a decline from July's 44.5%, coinciding with a record 6.3 months of inventory. This measured contraction in absorption relative to new supply indicates a clear shift toward buyer-favorable conditions in the London and St. Thomas region. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [London Ontario Real Estate Market Reports | Cassidy & Co.] [London & St. Thomas Market Conditions | CREA Statistics]

How the numbers connect

Calculates the month-over-month change in the sales-to-new listings ratio for the LSTAR board area between July and August 2026. Calculation: August 2026 ratio (37.5%) minus July 2026 ratio (44.5%) equals a decrease of 7.0 percentage points. Definitions: Sales-to-new listings ratio is the number of home sales divided by the number of new listings in a given period. The geography is the LSTAR board area (London and St. Thomas combined). Limit: This calculation establishes a change between two specific months but does not establish a sustained trend, seasonal pattern, or structural shift in the market. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics]

Absorption Slides Below Balanced Range as Inventory Peaks

In August 2026, the sales-to-new listings ratio for the London and St. Thomas Association of REALTORS® board area stood at 37.5%, down from 44.5% in July. This figure sits well below the 45% to 65% band that CREA treats as balanced, indicating that new listings are outpacing sales activity. The concurrent rise in months of inventory to a new peak of 6.3 confirms that supply is accumulating faster than it is being absorbed by buyers.

The divergence between property types offers a nuanced view of this broad-based cooling. While the composite ratio declined, townhouse and row unit sales actually increased by 7.1% year-over-year in the second quarter of 2026. Conversely, apartment inventory tightened slightly, dropping from 6.6 months in Q2 2025 to 5.8 months in Q2 2026. These segment-specific movements suggest that the overall buyer leverage is not uniform across all housing stock. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [London & St. Thomas Real Estate Statistics - August 2026 | viewhomes.ca] [London & St. Thomas Sales by Category | CREA Statistics] [London & St. Thomas Market Conditions | CREA Statistics]

Rising Bond Yields Pressure Fixed Mortgage Rates Nationwide

National financing conditions are introducing headwinds for prospective buyers, as long-term bond yields have increased globally, including in Canada. As of September 18, 2026, the lowest available five-year fixed mortgage rate in Canada was 4.24%, while the Bank of Canada held its policy rate steady at 2.25%. Rising five-year Government of Canada bond yields near 3.65% are exerting upward pressure on fixed rates, which could push them higher in the coming weeks.

These national financing trends do not directly measure local demand or price outcomes in London. However, the mechanism suggests that borrowers facing higher fixed-rate costs may reduce their purchasing power or delay transactions. The absence of target-scoped transaction data linking these rate changes to specific local sales volumes means the precise impact on London's absorption remains an analytical inference rather than a measured result. Sources: [Best mortgage rates Canada | Compare Canada mortgage rates | Ratehub.ca] [London & St. Thomas Interest Rate Changes | CREA Statistics] [Real Estate News Headlines from Across Canada | STOREYS]

Federal Infrastructure Funds Target Housing-Enabling Projects

The Canada Housing Infrastructure Fund provides $6 billion over 10 years to support housing-enabling infrastructure, with specific streams for direct delivery and provincial agreements. To qualify for funding, communities with populations over 30,000 must implement zoning changes allowing four units as-of-right. This federal initiative aims to remove infrastructure bottlenecks that constrain housing supply, potentially supporting development activity in eligible municipalities.

While these funds are allocated nationally, their implementation depends on municipal planning decisions and bilateral agreements with provinces. The requirement for zoning changes to allow four units as-of-right represents a policy lever that could influence future housing composition in larger cities. However, the retained evidence does not specify whether London has secured specific allocations or completed the necessary zoning adjustments under this framework. Sources: [Canada Housing Infrastructure Fund - Housing, Infrastructure and Communities Canada] [Ontario Student Housing Deliveries Set to Reach Record in 2026 | Urbanation]

The strongest counter-case

Townhouse and row unit sales rose 7.1% year-over-year in Q2 2026, and apartment inventory decreased from 6.6 to 5.8 months over the same period, suggesting that certain segments may be experiencing tighter conditions than the aggregate composite measure implies. Sources: [London & St. Thomas Sales by Category | CREA Statistics] [London & St. Thomas Market Conditions | CREA Statistics]

Living here

London maps 1,052 amenities, including 132 schools, 325 parks, 248 transit stops, 57 grocery stores, 14 childcare centers, 7 dog parks, and 269 recreation facilities. Named features include Queen's Park, Sobeys, Food Basics, and Fanshawe College transit stops.

Schools: School report cards show varied comparative performance. Oakridge Secondary School demonstrates leading comparative performance with significant improvement. A.B. Lucas and London Central Secondary Schools hold strong comparative positions. Clarke Road and Westminster Secondary Schools remain in lower comparative tiers, while Saunders and Sir Wilfrid Laurier Secondary Schools show mixed standing with slight improvements. The Fraser Institute cautions that the choice of a school should not be made solely on the basis of any one source of information. Sources: [Cleardale Public School]

The early signal

Months of inventory reaching a new peak of 6.3 in August 2026. How it reaches the market: High inventory levels increase competition among sellers, typically leading to longer days on market and reduced pricing power, which precedes declines in the sales-to-new listings ratio and average sale prices. Typical lead time: Inventory peaks often lead price corrections by one to three months as sellers adjust expectations to match market absorption rates. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics]

Next 3 months, Through December 2026

Prices: flat. Stable to slightly declining prices in the LSTAR board area, with continued buyer leverage due to high inventory. Why: The August 2026 sales-to-new listings ratio of 37.5% and 6.3 months of inventory indicate excess supply. National rising bond yields may further dampen demand, keeping prices stable or slightly lower. Buyers: buy now. Buyers benefit from high inventory and low absorption ratios, providing greater negotiating power and selection. Sellers: wait. Sellers face intense competition with 6.3 months of inventory; waiting may allow for better timing if inventory normalizes. Watch: A sustained increase in the sales-to-new listings ratio above 45% would signal a return to balanced conditions. Confidence: moderate. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [Best mortgage rates Canada | Compare Canada mortgage rates | Ratehub.ca]

Next 6 months, Through March 2027

Prices: falling. Modest price declines in the LSTAR board area as inventory continues to build and financing costs rise. Why: If the current inventory peak persists and national fixed mortgage rates continue to rise due to bond yield increases, seller pricing power will weaken further, leading to modest price adjustments. Buyers: buy now. Continued buyer leverage and potential price softening make this a favorable window for negotiation. Sellers: wait. Market conditions remain unfavorable for sellers; waiting may align with potential seasonal demand shifts in spring. Watch: A significant drop in months of inventory below 5.0 would indicate improved absorption and potential price stabilization. Confidence: low. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [Best mortgage rates Canada | Compare Canada mortgage rates | Ratehub.ca]

Next 12 months, Through September 2027

Prices: flat. Prices likely to stabilize in the LSTAR board area as new supply meets adjusted demand levels. Why: Long-term outlook depends on the pace of new construction deliveries and the impact of federal infrastructure funding on housing supply. If inventory normalizes, prices may stabilize after initial adjustments. Buyers: either way. Market conditions may normalize, reducing extreme buyer leverage but offering more predictable pricing. Sellers: either way. Sellers may find improved conditions if inventory decreases, but should monitor absorption ratios closely. Watch: Sustained growth in sales volume without corresponding inventory buildup would signal a market recovery. Confidence: low. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [Canada Housing Infrastructure Fund - Housing, Infrastructure and Communities Canada]

Assumptions: National interest rate trends will continue to influence local borrowing costs; Current inventory levels will persist or moderate gradually over the next year; No major local policy changes will alter housing supply dynamics significantly. What would reverse this: A rapid decline in interest rates or a surge in local employment could boost demand, reducing inventory and reversing the buyer-favorable conditions observed in August 2026. Sources: [London & St. Thomas Association of REALTORS® | CREA Statistics] [Best mortgage rates Canada | Compare Canada mortgage rates | Ratehub.ca]